What has seemed inevitable for some time now was finally confirmed yesterday evening (January 14th) when high street retailer HMV announced it is preparing to go into administration.
More questions were raised about the company’s future earlier this week when news of a £37.3m half-year, pre-tax loss was followed by their plans to embark on a month long, 25% sale throughout January.
Although HMV insisted the decision was made merely to provide ‘customer value’, its significance seemed hard to play down considering the plummeting sales which have been experienced by the music and film outlet, as a dramatic shift in trends towards the digital market and online shopping has resulted in several cost-cutting measures during the past few years.
With the administrators now called in, around 4,350 jobs have been put a risk, though the UK and Ireland’s 239 shops will remain open for the time being as the owners look to secure HMV’s future.
“The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection and in the circumstances therefore intends to file notice to appoint administrators to the company and certain of its subsidiaries with immediate effect,” a statement reads.
The problems being faced by HMV, so long a cornerstone of the British music buyer during the eras of vinyl, cassette and CD since it first opened in 1921, was dramatically highlighted last week when BPI figures showed another year-on-year rise in the digital market during 2012, with a huge 99.6% of all singles sold in the UK last year coming on the digital format.
And while numerous initiatives, led by the annual Record Store Day, have been launched recently in a bid to boost interest in more traditional record buying habits, the focus of these campaigns has tended to centre on independent record shops, leaving HMV caught in the middle of a battle it now looks to have ultimately lost.